UCaaS Update: Microsoft EEA with separated Teams

Will the UC puzzle be reshuffled starting on the 1st of October, 2023?

As agreed with the EU – starting on the 1st of October, 2023, Microsoft will offer new O365/M365 license types in the European Union and Switzerland, which no longer automatically include Teams bundled. Thus, European customers shall have more cost-efficient choices to integrate other UC manufacturers, such as Cisco Webex, Zoom, and RingCentral, … into Microsoft 365 / Office 365 instead of Microsoft Teams. Workload overlaps and double licensing are reduced or eliminated. In addition, Microsoft has announced that it will make the APIs even more open in the future so that other manufacturers can improve their integrations into the Office world.

We have calculated multiple customer scenarios and collaboration/UCaaS workload distributions as combinations of other UC manufacturers integrated with M365/O365 versus Microsoft/Teams alone using the existing licensing model and the new EEA licensing model. According to the new pricing structures published by Microsoft, it is cheaper for existing M365/O365 customers who prefer to or want to continue to use Teams if they stay on the existing licensing model. Microsoft Teams becomes more expensive for new customers due to the separate licenses. It will be interesting to see what the discount strategy of Microsoft and its UC competitors will look like in tight competitive situations. Customers who have integrated other UC solutions and UC clients such as Cisco Webex, RingCentral, or Zoom, who are considering their integration as an alternative to Teams, will benefit more from the new EEA licensing model because there is less or no workload overlap / double licensing / double costs of workloads! 

There are sometimes very narrow commercial situations if you only compare the most architecturally/technically and cost-efficient manufacturers/combinations and workload distributions concerning the basic licensing. Then, the art of comparing “apples with apples” makes the difference. A precise understanding of licensing quibbles and the small but subtle differences in additional licenses from the various manufacturers can then surprisingly lead to more considerable cost differences for some customers. Depending on the manufacturer and the manufacturer’s chosen licensing model, not everything that might be required is automatically included in the essential licenses! 

Especially in competitive situations that at first glance appear to be commercially close, a solid, holistic, detailed consideration of architecture, technology, functionalities, peripheral costs, and add-on licenses must be correlated with the commercial calculation- and above all, with the differentiated weighting of the customer! 

However, the cost differences depending on the constellation and collaboration/UCaaS workload distribution can continue to be extremely large if the most unsuitable UC manufacturers are selected or the wrong variety of manufacturers in the respective customer context are chosen. These uneconomic scenarios still exist for customers! Particularly during the pandemic, various style blossoms emerged quickly. The less holistic and differentiated you are when correlating architectural/technical and licensing details, the more costs are overseen and will follow later! Even worse is not comparing/calculating at all – and choosing any manufacturer or several overlapping manufacturers because customer X or partner Y did it “the same way.” We have already seen over 60% of additional costs in our market analyses, RFIs, RFQs, and RFPs. 

If companies do not make the right strategic decisions based on solid analysis, we see protective reflexes in many companies to reduce financial damage: They reduce functionality or equip fewer users than initially planned because it becomes apparent during or after the transformation that costs have been overlooked or not considered.  As long as money plays a role in companies, no “one fits all” exists! Not exactly one manufacturer or combination of manufacturers suits all customers! No vendor can supply all five collaboration workloads, including the three UC workloads, and all peripherals, such as telephones (if desired), video room devices, and contact centers, entirely from a single source.

Important Note: Everything must be calculated individually for each customer and correlated within the specific context! GLUCH Communications calculates so-called “Architecture Correlated Business Cases” as both are mandatory: distinguished vendor-independent architectural knowledge as well as a deep understanding of all licensing models.